China is rising. Will the China era come? What does an awakening Giant mean for the rest of the world? This blog will focus on these questions and introduce current economic events and politic news of China.

Thursday, August 11, 2005

The Rise of a New Power (1)

SHANGHAI--Richard Qiang could be an archetypal American. The son of blue-collar workers, Qiang thrived in school and graduated with a law degree from prestigious Fudan University. Then he landed a job here with Paul, Hastings, Janofsky & Walker, a New York law firm with dozens of corporate clients. The 25-year-old attorney owns a car and apartment, and his only complaint involves the long workdays. "I have no time to find a girlfriend," he grins.

Only one thing distinguishes Qiang from a yuppie in Chicago or San Francisco or Manhattan: He belongs to the Communist Party. Like many ambitious young Americans who get involved in politics, Qiang's motives are pragmatic. He hopes to work for the government someday, helping craft China's budding legal system. Party membership is one way to open the right doors.Angst. But Qiang's path to upward mobility--like that of China itself--is causing angst among Washington policymakers, Midwestern factory workers, and millions of others worried about the emergence of China as an economic and military superpower. It's an article of faith in the West that democracy and free enterprise must exist hand in hand. Yet China is transforming itself from a moribund state-run economy into one of the world's most vibrant marketplaces--and crowning thousands of millionaires in the process--all within the grasp of the Chinese Communist Party.China is teaching the West something new. Its economy, growing at 9 percent per year, will most likely become the second largest in the world by 2020, behind only the United States. Last year Americans spent $162 billion more on Chinese goods than the Chinese spent on U.S. products. And that gap has been growing by more than 25 percent per year, as China moves from building toys and tchotchkes into more-sophisticated appliances, auto parts, and semiconductors. China's consumer class, meanwhile, is spending like lottery winners on everything from bagels to Bentleys--and will soon outnumber the entire U.S. population. China's explosive growth "could be the dominant event of this century," says Stapleton Roy, former U.S. ambassador to China. "Never before has a country risen as fast as China is doing."A communist rival--with wealth--is a new worry for Washington. Some fret about another Soviet Union in the making, flush with cash for missiles, satellites, and other advanced weapons--as well as a target to use them on: the island of Taiwan, which China considers a renegade province. Defense Secretary Donald Rumsfeld claimed earlier this month that China's military budget is much higher than it acknowledges--probably the third biggest in the world. "Since no nation threatens China," he mused, "one must wonder: Why this growing investment?"Yet there may be even more at stake in an economic confrontation with China. Since the expiration of long-standing trade quotas in January, Chinese textile imports to the United States have leapt by 48 percent, prompting the Bush administration to enact new quotas to protect U.S. jobs. Washington and Beijing have also been lobbing verbal missiles over China's fixed exchange rate, which makes Chinese products even cheaper than they'd be with a floating currency.